Replies to This Discussion

Permalink Reply by Gary Hogan on December 3, 2013 at 17:30

Usually there maybe more than the money involvrd. I am not sure about Louisiana law, but in Texas the Mineral Estate is the dominate Estate over the surface rights. As such, the mineral owner actually has more to say about what can and will occur on the surface of the land to acquire the mineral estate. This has caused severe hardship for those who did not own the mineral estate in Texas up to and including the mineral owner allowing drilling on the surface land many times way too close to the surface owners residence. This cause severe devaluation of that property owners property value, and not the least of exposure to drilling activities as close as 200 ft from their homes. Allowing right of way to drilling activity and actually TAKING of surface property to drill without the surface residence agreement. Giving up say so and surface rights should be calcilated into any upfront money. Also remember those who offer ALWAYS know more than you. They would not make significant offers IF they thought they were going to lose. They nearly always have a plan that might come back to dirupt your property. Always keep your mineral interest lease OK but sell never JUst IMO.

• ▶ Reply

Permalink Reply by Ed on December 10, 2013 at 5:53

You are right about the mineral estate Gary. I feel like I need to clarify a tiny bit as to what I was trying to say.

In this specific case, if the mineral owner sells only a portion of her royalty interest, then she still retains control of the actual mineral estate itself. Also, she can sell just a portion of the royalty in the producing well/geological zone only. This gets tricky and the language is specific.

Be sure you use an attorney that is well versed in Louisiana oil and gas law. I have seen several botched estates/leases/deeds/etc.. from out of state attorneys who acted as though, for instance, Texas law would dictate. Especially when dealing with forced heirship, prescription and taking into account community property.

Also, no one knows what the future holds for oil and gas production in the United States. Buying minerals or royalty is like buying real estate. Sometimes you make a win, sometimes you lose. Even if it's what you do for a living. Its a total crap shoot.

Ed

• ▶ Reply

Permalink Reply by Dan Arnold on December 10, 2013 at 5:03

I agree with Ed and to some degree with Gary. We are fortunate in the United States because our people are allowed to own land and minerals.

I generally advise people not to sell their mineral rights unless there is very great need. The mineral owner is in a position to negotiate with producers over the terms of the lease, which may include what happens on the surface. If you sell that right, you will have no control over future leases.

The minerals you now own will belong to whoever you leave them to when you depart this mortal coil, and if properly managed (a whole section of this website could be used to discuss the dilution of interest ownership over the course of multiple generations) could provide valuable income to them. In addition to the present royalty (now declining) there may be additional leasing opportunities and other plays not yet anticipated.

I understand the immediate economic benefit to you and you have been logical in your calculations, but the future is uncertain. Unless you are experiencing great hardship that could be relieved by selling, I suggest that you should follow Ed's advice and benefit from the future revenue. The buyers are anticipating a substantial return on their investment, probably not in the short term, but over time.

• ▶ Reply

• ‹ Previous
• 1
• …
• 3
• 4
• 5
• Next ›
• Page